Transactive Systems’ growth has reportedly slowed after the Bank of Lithuania imposed limits on it.
The Bank of Lithuania said Jan. 20 that the electronic money institution (EMI), which is licensed by regulators in Lithuania and the United Kingdom, cannot take on new customers or provide services to finance or cryptocurrency clients until the bank completes a review, Bloomberg reported Thursday (Feb. 23).
The bank cited the Transactive Systems’ local subsidiary’s “serious infringements” of anti-money laundering (AML) laws and “breaches and shortcomings” in controls, according to the report.
Transactive Systems did not immediately reply to PYMNTS’ request for comment.
A company spokesperson told Bloomberg that Transactive Systems is “disappointed by Bank of Lithuania’s decision, and we are working to quickly resolve issues related to their findings.”
The firm had been processing transactions worth more than $1 billion euros (about $1.1 billion) each month and has said it is “one of the fastest-growing FinTech companies in Europe,” according to the report.
Transactive Systems has said it focuses on serving clients in cryptocurrencies, gambling, foreign exchange (FX) trading and other “compliance-intense industries,” the report said.
The firm is still approved in the U.K. by the Financial Conduct Authority (FCA), per the report.
PYMNTS reported in 2019 that Lithuania wants to become a global FinTech powerhouse and that the country has become a bright spot in Europe for FinTech innovation.
Regulation is perhaps the strongest driver of Lithuania’s FinTech-friendly environment, and FinTechs have found that it supports their innovative ambitions.
In June, PYMNTS reported that Lithuanian startups were managing well and raising millions of dollars in funding even amid Russian threats to punish the country over blocked rail shipments to the enclave of Kaliningrad.
Many FinTechs in Lithuania use an electronic money license issued by the country’s central bank to serve other markets in the European Economic Area.
The Bloomberg report comes two days after the FCA told eMoney firms that they must change some of their practices.
FCA Director of Payment and Digital Assets Matthew Long sent a letter to eMoney company CEOs and directors Tuesday (Feb. 21) ahead of new Consumer Duty rules that are to take effect on July 31, saying: “For many firms, meeting the Duty will require a significant shift in culture and behaviour.”
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